The Federal Reserve should move to cut interest rates, governor Michelle Bowman said Saturday, citing dramatic negative revisions to the monthly jobs report released at the beginning of August.
Bowman was one of the board’s two dissenters from its decision to hold rates steady in July. The Fed board generally decides on a rate decision unanimously; a double dissent is rare.
Bowman’s position, made in remarks at a banking summit in Colorado, comes as the Fed board has faced significant political pressure from President Trump to cut rates, including making noises about firing Chair Jerome Powell.
“With economic growth slowing this year and signs of a less dynamic labor market becoming clear, I see it as appropriate to begin gradually moving our moderately restrictive policy stance toward a neutral setting,” she said in her remarks as prepared. “Taking action at last week’s meeting would have proactively hedged against the risk of a further erosion in labor market conditions and a further weakening in economic activity.”
The jobs report released Aug. 1 showed that the U.S. only added 73,000 jobs in July, far lower than expected. That figure was also accompanied by significant downward revisions for jobs figures in June and July.
Bowman also said she was confident that the president’s tariff regime would not present a “persistent” shock to inflation, which she expected to eventually fall to the Fed’s goal of 2 percent.
Bowman and Fed governor Christopher Waller, who also advocated for a rate cut, could soon be joined by Trump pick Stephen Miran, who will temporarily serve on the board to replace governor Adriana Kugler while the president mulls a long-term replacement. Bowman and Waller were nominated by Trump during his first term.
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